Should I cancel my life insurance that I am playing for?

Question

I pay about $1500/yr for a life insurance policy with Gaurdian that is for 250,000. I was told that I will be able to use the 250,000 once of retirement age if I need it. I dont know the details too well but I do know that I have been paying for 3 years now on this policy.

My employer pays for my life insurance for 3x salary. I was thinking to cancel the Gaurdian lift insurance and put the money into a Roth IRA or something. I dont know if I will be able to get the money out either.

Is it worth to keep this policy I am paying for. Anyone have expierence with this policy? Please help.

Answer 1

Buying insurance with the intent of retiring on it is usually a bad idea.  The primary use of life insurance should always be to protect the benficiaries' interests.

With the Guardian, it is probably a whole life policy.  If that's the case, dividends are not guaranteed, borrowing from the policy may have unforeseen tax consequences, you might only be able to borrow from the policy instead of taking withdrawals, loans usually reduce the amount insured, interest charges on loans and internal costs may be higher than your dividends which may result in the collapse of your policy.

Here's an article that goes into detail:

Answer 2

Probably best to have a rest.looks like you can get some ideas here.

http://insurance.online-assistant.info

Answer 3

You need more than 3X salary if you have dependents most experts recommend 8-10X salary.  Definitely cancel the whole life and buy 5-8X salary 20 year level term.  Invest the difference into a long term Roth you'll be much better off at retirement.  

Whole life policies pay a return of 3-5% and good growth mutual fund will return somewhere close to 10-12% over the years.  In fact that is what the insurance co does is invest the money in growth products and helps itself to a healthy commission.

Answer 4

It sounds like you have whole life or "universal life" coverage.  You might be better off with a term policy.